Mutual Funds - Its Humble Beginnings
Mutual funds continue to be popular among investors mainly because of the return rate it brings to their investments. Contrary to traditional ways of investing through certificates of deposit and money market accounts, when you invest in mutual funds, you can expect the largest return for your investment.
For those who are just beginning to invest their hard-earned money, investing in mutual funds is the best option to take because you won't have to make decisions which can alter the potential returns of your outlay. Investing in mutual funds is a good way to get a feel of things before plunging in the industry. And since mutual funds are considered as low risk investments, you need not worry about your money because it is safely spread over different investment options.
The mutual funds of today are very different from the mutual funds our grandfathers invested in. It took several years to add the changes necessary for it to become what it is today. Even historians are still undecided on where the concept of mutual funds started. The concept of mutual funds was thought to be conceptualized in 1822 by King William I of the Netherlands when he launched several closed-end investment companies. But other historians are contesting this, believing that it was Adriaan van Ketwitch, a Dutch merchant who created an investment trust in 1774 came up with the idea.
Nevertheless, whoever came up with the idea really did some good thinking because it was an idea that was feasible enough for France and Great Britain to acknowledge. The United States grasped the idea only in the 1890's. In 1907, a fund called the Alexander Fund was established in Pennsylvania and was said to have paved the way for the modern mutual fund. Addendums and modifications were made later to include the ability to make withdrawals on demand and semi-annual issues.
In 1924, the Massachusetts Investors Trust was established and was the forerunner of the modern mutual fund of today. By the following year, the Trust grew to having 200 shareholders with an asset base of almost $400,000.00. The fund went public in 1928. In the same year, the Wellington Fund was created and was the first one to include stocks and bonds as investment options for their shareholders. Because of this, stock value increased making 1928 one of the most memorable years of the mutual fund history.
The next year however saw the worst of the American economy - the 1929 Wall Street Stock Market Crash. Because of this crash, the prices of stocks declined rapidly and the demand for goods lowered quickly which led to the Great Depression. Yet something positive became of this downside - the government finally took notice of the mutual fund industry and established laws to protect investors.
Investors readily welcomed this move by the government and stock market trading began to rise again. Ever since then, the mutual fund industry continues to grow. And throughout the years an increasing number of people become interested in mutual funds.
Today, buying shares in a mutual fund is a sound investment for anyone, beginners and expert alike. Even with its current success, the industry has still a lot to offer to those who patronize it. And the great thing about getting mutual funds is that you can take part of a worldwide profit-bearing phenomenon without risking so much. - 23223
For those who are just beginning to invest their hard-earned money, investing in mutual funds is the best option to take because you won't have to make decisions which can alter the potential returns of your outlay. Investing in mutual funds is a good way to get a feel of things before plunging in the industry. And since mutual funds are considered as low risk investments, you need not worry about your money because it is safely spread over different investment options.
The mutual funds of today are very different from the mutual funds our grandfathers invested in. It took several years to add the changes necessary for it to become what it is today. Even historians are still undecided on where the concept of mutual funds started. The concept of mutual funds was thought to be conceptualized in 1822 by King William I of the Netherlands when he launched several closed-end investment companies. But other historians are contesting this, believing that it was Adriaan van Ketwitch, a Dutch merchant who created an investment trust in 1774 came up with the idea.
Nevertheless, whoever came up with the idea really did some good thinking because it was an idea that was feasible enough for France and Great Britain to acknowledge. The United States grasped the idea only in the 1890's. In 1907, a fund called the Alexander Fund was established in Pennsylvania and was said to have paved the way for the modern mutual fund. Addendums and modifications were made later to include the ability to make withdrawals on demand and semi-annual issues.
In 1924, the Massachusetts Investors Trust was established and was the forerunner of the modern mutual fund of today. By the following year, the Trust grew to having 200 shareholders with an asset base of almost $400,000.00. The fund went public in 1928. In the same year, the Wellington Fund was created and was the first one to include stocks and bonds as investment options for their shareholders. Because of this, stock value increased making 1928 one of the most memorable years of the mutual fund history.
The next year however saw the worst of the American economy - the 1929 Wall Street Stock Market Crash. Because of this crash, the prices of stocks declined rapidly and the demand for goods lowered quickly which led to the Great Depression. Yet something positive became of this downside - the government finally took notice of the mutual fund industry and established laws to protect investors.
Investors readily welcomed this move by the government and stock market trading began to rise again. Ever since then, the mutual fund industry continues to grow. And throughout the years an increasing number of people become interested in mutual funds.
Today, buying shares in a mutual fund is a sound investment for anyone, beginners and expert alike. Even with its current success, the industry has still a lot to offer to those who patronize it. And the great thing about getting mutual funds is that you can take part of a worldwide profit-bearing phenomenon without risking so much. - 23223
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The author writes articles that tackles about mutual funds in the Philippines and discuss the history of mutual funds on his blog.
posted by X - Men @ 3:15 AM
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